11 POGOs to Reopen, Five Close Permanently During COVID-19 Pandemic

  • POGOs started laying off employees a few weeks ago
  • High overhead and lease expenses led to the permanent closures
  • PAGCOR approved other POGOs after their outstanding tax debts were paid
  • The lack of POGO operations has led to losses for PAGCOR of around $118m a month
Door sign reading, "CLOSED DUE TO COVID-19"
11 POGOs have been given permission to reopen by the Philippine gaming regulator at the same time that five have closed for good because of the COVID-19 pandemic. [Image: Shutterstock.com]

Mass layoffs

While 11 Philippine offshore gaming operators (POGOs) have received clearance to reopen amid the COVID-19 pandemic, others have not been as lucky. Five POGOs, as well as 10 of their local service providers, will close permanently because of COVID-19.

began laying off around 2,000 employees

The closed POGOs point to the business environment becoming too difficult as a result of the virus. About two weeks ago, the five POGOs, along with their local service providers, began laying off around 2,000 employees. The positions eliminated included iGaming studio production staff, live dealers, and IT, among others.

Permanent closures

In addition to the job losses, the closures have led to vacancies in three POGO offices located in the central business district of Makati. The POGOs affected are based in China, Europe, and Macau.

A source close to The Philippine Star explained that several factors led to the closures, including high overhead costs and prohibitive lease expenses. The inability to resume operations based on strict regulations issued by the Bureau of Internal Revenue (BIR) could also be a contributing factor.

The source stated further that it would not be surprising to find more firms and their local service providers shutting down soon due to cash shortages after three months of suspended operations.

The five online gaming firms that have shut down comprise 11% of the 45 POGO companies that operate in the Philippines.

Cleared to operate

In early May, PAGCOR provided clearance for POGOs to get back to work. By May 22, however, no license holders had been granted permission to offer services because of the failure to pay their outstanding tax debt. Anyone operating at the time without paying the debt would be shut down by the Bureau of Internal Revenue.

Last weekend, PAGCOR announced that the BIR had given clearance to 11 POGO license holders for operation. Two more license holders who have submitted BIR Clearance are waiting for Authority to Resume Operations (ARO). These two POGOs must clear an inspection of their workspaces and settle any outstanding debt to PAGCOR before they can earn approval.

Sizeable financial losses

Officials told POGOs to suspend services on March 15 as the COVID-19 pandemic worsened. This included all land-based casinos, poker rooms, sports betting shops, slot machine venues, and bingo clubs. On March 18, the online sector was told to shut down.

PAGCOR was losing $118m in potential revenue each month

Since that time, the industry has suffered significant losses. In April, reports indicated that PAGCOR was losing $118m in potential revenue each month.

The local real estate is also taking a hit, as the POGOs that close are vacating their offices. In the current pandemic environment, real estate firms believe that finding new tenants might be difficult.